BlockBeats report: On July 30, South Korea’s NH Investment & Securities maintained its “Buy” rating on SK Hynix but lowered its target price from ₩4.1 million to ₩3.4 million. Taking a cautious stance due to the HBM4 shipment timeline and faster-than-expected adoption of long-term agreements (LTAs), the firm slightly reduced its profit forecasts for 2027–2028. Nevertheless, the focus remains on the sustainable supply-demand and profitability driven by LTA implementation, rather than industry downturn cycles. Currently, the market retains significant skepticism regarding the effectiveness of LTAs, requiring further time for validation. Once the impact of LTAs is confirmed by the market, it is expected to trigger a re-rating of the company’s valuation. Meanwhile, although the company’s cash generation capability has significantly improved, the absence of a clear shareholder return framework remains disappointing. Establishing explicit capital allocation guidance would serve as a key catalyst for share price appreciation. Given the company’s solid fundamentals, the recent stock correction has been excessive.
SK Hynix reported sales of 79.3 trillion KRW in the second quarter of 2026, representing a 256.8% year-over-year increase and a 50.9% sequential increase; operating profit reached 60.5 trillion KRW, up 557.2% year-over-year and 61.0% sequentially. Due to product mix adjustments and the implementation of long-term agreements, the company’s performance slightly missed market expectations. Looking ahead to the third quarter of 2026, with accelerated HBM4 shipments, DRAM and NAND bit growth are expected to increase sequentially by 10.0% and 1.3%, respectively, while the combined average selling price is projected to rise by 16.5% and 7.0% sequentially. SK Hynix’s operating profit for the third quarter of 2026 is forecasted to reach 76.2 trillion KRW, up 569.6% year-over-year and 25.9% sequentially.